CHENNAI, May 14: State government-owned Tamil Nadu Industrial Development Corporation (Tidco) has pulled out of the city-based Tamil Nadu Dadha Pharmaceuticals Ltd by disinvesting its entire stake in the company.

Following this, the promoters have decided to merge the company with Baroda-based Sun Pharmaceuticals Industries Ltd. The boards of the two companies will meet day after tomorrow to approve the merger.

Tidco held an equity stake of 26 per cent in Tamil Nadu Dadha Pharmaceuticals. Tidco sold its entire financial stake in the company to managing director S. Mohanchand Dadha and his ilk. Following the acquisition of Tidco holding in the company, the promoters' stake in the company has risen to 51 per cent (The private promoters were holding 25 per cent equity in the company prior to Tidco disinvestment. The rest are held by the public). The equity base of the company is around Rs 1.65 crore.

Tidco quit Tamil Nadu Dadha Pharmaceuticals last week after selling its holding at a price of Rs 87.42 per share. The disinvestment would have fetched Tidco a tidy sum of around Rs 3.75 crore.

Tamil Nadu Dadha Pharmaceuticals is among the state PSUs identified for disinvestment by the state government long ago. Mohanchand Dadha said his company had appointed a Mumbai-based consultant to evaluate the company and suggest the appropriate swap ratio. The consultant, he said, would give its report in three weeks.

Dadha claimed that his company had notched up a turnover of around Rs 60 crore for the year ended March 1997 and recorded a profit before tax (PBT) of about Rs 1.2 crore.

Tamil Nadu Dadha Pharmaceuticals was set up in 1973 in the joint sector. Its Dadhanagar bulk drug facility near here produces over a dozen activities. The facility also has a full-fledged research unit. It produces anti-cancer drugs like cisplatin, carboplatin and formestane as well substances like nicorandil (an new anti-hypertensive), gabapentin (an anti-epilelptic) and fentanyl (analgesic).

The Rs 190-crore Sun Pharmaceuticals Industries Ltd has a strong presence in the areas of cardiology, psychiatry, neurology and gastroenterology. It has two units in Gujarat.

Dadha said the merger was an inevitable step in the context of the current phase of liberalisation and globalisation. "Small companies like ours will be wiped out," he pointed out.

Dadha said a survey of pharmaceutical companies in the country by the Operation Research Group (ORG) had placed Tamil Nadu Dadha Pharmaceuticals at number 78 in rating. Following its amalgamation with Sun Pharma, the merged entity would find itself within the first 15 list, he pointed out.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.